Packaging products to seize customers’ attention quickly
Leaders with the software division of Siemens, a global technology company focused on industry, infrastructure, transport, and healthcare, understood the need to assess the innovation of software-as-a-service (SaaS) models. Their motivation was to take advantage of cloud technology and data analytics capabilities in light of the SaaS transition trend in the field of organizational software. The SaaS planning department set itself the goal of creating internal innovation tracks to spur customer problem-solving initiatives based on the SaaS business model.
“I’m proud of the fact that we managed to reach an initial validation of ideas, to disqualify a few, and to advance others, and through this, we’ve come to understand the difference between an idea that looks good on paper and one which a dedicated team can drive forward. ModelZ’s systematic and interactive framework provided both our participants and us with significant value.”
Yaron Riani, VP, SaaS
Full accelerator program for organizational startups
Over this process, which lasted several months, during which we worked together about 30% of the time “in the building” and the rest on physical and digital discovery and validation trips, we received a sharply-focused picture which allowed us to sketch out the first stage of the process. This included mapping initial products which were appropriate for transitioning to the SaaS model, designing new service models to replace existing value propositions, and of course, the appropriate models for new customer segments. Additionally, we mapped the risks and opportunities which would accompany the transition from the initial sale model of traditional software to models based on service, providing a reasonable response to a majority of the critical risks along the way.
3 Funded Ventures
At the end of this track, which also included market and customer validation with the lean startup approach, 6 ventures reached the final round, three of which received seed funding in order to continue their business concept validation.
Summary of Insights
When talking about business models, we’re not just discussing what value you want to provide for the customer, but also the way you’re providing it and which relationships are created between the company and its customer.
In transitioning to a service model, it’s important to also recognize which capture and lock-in mechanisms you have at your disposal and how you can leverage them to minimize risks and how to help the new business model really take off.
Microsoft, anticipating the cloud revolution, decided on the courageous cross-organizational step of disrupting its own business model so as to handle the revolutionary technology this demanded, and changed its model from one of per-device licensing to one of user service package licensing, shifting to an SaaS model of usability and functionality.